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By Tim Stelloh, Tracy Snyder and Reuters

Italian Prime Minister Matteo Renzi will resign after voters rejected a constitutional referendum that would have given his office sweeping new powers.

Renzi made the announcement during a news conference early Monday in Rome.

Italian Prime Minister Matteo Renzi announces his resignation Monday in Rome.Alessandro Bianchi / Reuters

The proposal lost by a wide margin, exit polls and early projections showed Sunday, throwing Renzi's future into doubt and opening the door to renewed political instability.

The euro fell sharply against the dollar in light of the exit polls, slipping from $1.0625 to $1.0550.

Earlier, a trio of polls for various television stations indicated that the "No" camp was ahead by at least 8 percentage points. Within half an hour, projections based on the initial counts suggested that Renzi could lose by as much as 20 points.

If it's confirmed, the result would represent a new blow to the European Union, which is struggling to overcome an array of crises and was eager for Renzi to continue his reform drive in the euro zone's heavily indebted third-largest economy.

Renzi, 41, took office in 2014 as an anti-establishment "demolition man" determined to crash through a smothering bureaucracy and redraw the nation's creaking institutions.

Sunday's referendum, designed to hasten the legislative process by reducing the powers of the Senate and regional authorities, was to have been his crowning achievement.

However, his reforms so far have made little impact, and the opposition 5-Star Movement has claimed the anti-establishment banner, tapping into a populist mood that saw Britons vote to leave the European Union and Americans elect Donald Trump as president.

After voting in Genoa earlier Sunday, Beppe Grillo, founder of the 5-star Movement — which backed a "No" vote — said the country needed new elections as soon as possible. His party is running neck and neck with Renzi's Democratic Party in opinion polls.